Obama Regime Sells Treasuries Directly To China

China can now bypass Wall Street when buying U.S. government debt and go straight to the U.S. Treasury, in what is the Treasury’s first-ever direct relationship with a foreign government, according to documents viewed by Reuters.

The relationship means the People’s Bank of China buys U.S. debt using a different method than any other central bank in the world.

The other central banks, including the Bank of Japan, which has a large appetite for Treasuries, place orders for U.S. debt with major Wall Street banks designated by the government as primary dealers. Those dealers then bid on their behalf at Treasury auctions.

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I guess when the bank comes calling, you have to open the door.

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One Response to Obama Regime Sells Treasuries Directly To China

  1. messup says:

    This was established in an “open ended” change in the 1970’s. Wasn’t meant to have this “breadth” of control but with Mr. Obama and Geithner at the helm…”Rule of Law” is merely an “irritant.”

    The Exchange Stabilization Fund (ESF) consists of three types of assets: U.S. dollars, foreign currencies, and Special Drawing Rights (SDRs), which is an international reserve asset created by the International Monetary Fund. The financial statement of the ESF can be accessed at “Reports” or “Finances and Operations.”

    The ESF can be used to purchase or sell foreign currencies, to hold U.S. foreign exchange and Special Drawing Rights (SDR) assets, and to provide financing to foreign governments. All operations of the ESF require the explicit authorization of the Secretary of the Treasury (“the Secretary”).

    The Secretary is responsible for the formulation and implementation of U.S. international monetary and financial policy, including exchange market intervention policy. The ESF helps the Secretary to carry out these responsibilities. By law, the Secretary has considerable discretion in the use of ESF resources.

    The legal basis of the ESF is the Gold Reserve Act of 1934. As amended in the late 1970s, the Act provides in part that “the Department of the Treasury has a stabilization fund …Consistent with the obligations of the Government in the International Monetary Fund (IMF) on orderly exchange arrangements and an orderly system of exchange rates, the Secretary …, with the approval of the President, may deal in gold, foreign exchange, and other instruments of credit and securities.

    So, in summation, a “reinterpretation” of this charter is consistent with this administration’s objective of Centralization, command-and-control economic model a la Soviet Union.

    And this is what a second term of this “gang of fellow travelers” is going to unfold before We The People’s very eyes? God Bless America. Amen.